CEC’s reorganization of Nanjing Panda is a model for central enterprises to reorganize local state-owned enterprises. Later, similar mergers and acquisitions were called the Panda model.
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CEC indirectly controls Nanjing Panda
Plans to reorganize seven electronics companies including Nanjing Panda
The long-awaited integration of Nanjing electronics companies by China Electronics Corporation (CEC) has finally been settled. Last week, Nanjing CEC Panda Information Industry Co., Ltd. (hereinafter referred to as "CEC Panda"), a joint venture jointly invested by CEC, Nanjing State-owned Assets Supervision and Administration Commission, and Jiangsu Guosen Asset Management Group, was established. According to the agreement, CEC Panda will hold 47.98% of the equity of Panda Group and indirectly hold 51.1% of the equity of Nanjing Panda. So far, seven Nanjing electronics companies, including Nanjing Panda Electronics, have been officially incorporated into CEC.
"Physical changes are easy, but chemical changes are difficult." How to expand the main business and divest auxiliary businesses, how to balance the interests of all parties, how to ensure cultural integration and management upgrades, etc., have become the "giant" CEC The real problems facing us.
CEC takes ownership of Nanjing Panda
At the listing ceremony of CEC Panda, Luo Zhijun, member of the Standing Committee of the Jiangsu Provincial Party Committee and Secretary of the Nanjing Municipal Party Committee, Li Jinlin, Vice Governor of Jiangsu Province and other leaders were present. However, only two or three media outlets in Jiangsu Province were invited. A reporter from a local core media interpreted it this way: "For the Nanjing Municipal Government, this matter is a bit embarrassing. Nanjing Panda has become a central enterprise, which means that the local government has not done a good job in the enterprise, or has no ability to support it."
In fact, CEC's reorganization of local enterprises in Nanjing began in 2004. On June 30, 2005, Yang Xiaotang, then general manager of CEC, formally signed an agreement with the Nanjing State-owned Assets Supervision and Administration Commission. The Nanjing Municipal State-owned Assets Supervision and Administration Commission entrusted CEC to perform its responsibilities as an investor and reorganize and manage Nanjing Panda Electronics, Nanjing Huadong Electronics, and Nanjing Jinning Electronics Group Co., Ltd. Company and Nanjing Korida Electronic Equipment Co., Ltd. According to the agreement at the time, the Nanjing State-owned Assets Supervision and Administration Commission allocated four companies including Nanjing Panda to CEC and at the same time could own 12% of CEC's shares, thus becoming a shareholder of CEC.
However, no substantive measures have been taken in the reorganization. CEC changed its leadership in October of that year, and Xiong Qunli became the new head of China Electronics as chairman and party secretary. Xiong Qunli proposed that the assets of Nanjing Panda and other four companies should be re-audited and evaluated, and the final share exchange ratio should be determined based on their net assets. This change delayed the pace of restructuring.
The source said: "Nanjing is not satisfied with the latter plan, but there are not many options. Like Nanjing Panda, it will either be merged with a central enterprise or sold to a private enterprise. And Nanjing Panda Affected by the financial black hole of Panda Mobile and the huge loss of more than 1 billion yuan, the Nanjing State-owned Assets Supervision and Administration Commission decided to cooperate with CEC. "
"This restructuring created a situation where central enterprises restructured local state-owned enterprises. A model of cross-shareholding between local state-owned assets and central enterprises,” said a person from the Nanjing State-owned Assets Supervision and Administration Commission.
Both parties hope to complement each other's advantages
The announcement issued by Nanjing Panda shows that CEC, with its subsidiaries Nanjing Changjiang Electronic Information Industry Group Co., Ltd., Nanjing Sanle Electronic Information Industry Group Co., Ltd., Nanjing Three companies of China Electronics Information Industrial Development Co., Ltd. contributed 700 million yuan in equity and cash, accounting for 70% of the shares; Jiangsu Guosen Asset Management Group Co., Ltd. and the State-owned Assets Supervision and Administration Commission of the Nanjing Municipal People's Government invested in Nanjing Panda Electronics Group Co., Ltd. The company, Nanjing Huadong Electronics Group Co., Ltd., Nanjing Jinning Electronics Group Co., Ltd., and Korida Electronic Equipment Co., Ltd. invested in equity valuation, each accounting for 15% of the shares. Nanjing Panda said the agreement did not involve injecting assets into the listed company.
“This is not a merger, but an agreement transfer, so the important thing is that the three parties determine their respective proportions, rather than the specific amount of capital contribution.” Regarding the registered capital of China Electronics Panda, which is only 1 billion, sources Explain it this way.
“Nanjing Panda’s military communication products should be the most promising one for CEC.
"Industry insiders said that the military satellite communication products with independent technology developed by Nanjing Panda have relatively obvious advantages and are widely used in the military field. As the country further increases investment in the national defense and military industry, Nanjing Panda's military communication products It will definitely grow and is likely to bring benefits to CEC in the future.
In the latest annual report of Nanjing Panda Electronics Co., Ltd., the signs of the “marginalization” of the traditional color TV business have become clear, “the company’s next development goals. It is the largest satellite communications R&D and production base in the country."
On the other hand, as the first Chinese electronics company, Nanjing Panda has created many "firsts": the first "China's first" in the electronics industry Well-known Trademark", the launch of the first domestic brand mobile phone, etc., its brand power cannot be underestimated. Yang Xiaotang, former general manager of CEC, once pointed out: "From a group level, we do not lack financing channels, but what we lack is a brand. Because brand is the image of a company and a symbol of excellent technology and quality services. ”
CEC seeks “from quantitative change to qualitative change”
“The reorganization of Nanjing’s seven state-owned electronics enterprises is the need for the reform, development and expansion of central enterprises and the adjustment of CEC’s industrial structure. The need for industrial layout adjustment is also the strategic need for the development of Nanjing electronics enterprises. In this reorganization, CEC will gradually expand within the resources of the entire group and against the background of both international and domestic markets. It is of great significance for CEC to increase industrial scale, improve industrial layout, and promote industrial development. Xiong Qunli, Chairman of CEC, said.
As a large state-owned backbone enterprise directly managed by the central government, China Electronics is also the largest state-owned IT enterprise. Its main business covers integrated circuits and components, computers and key components. , software and system integration, communications and 3C terminals, special electronic information equipment, and business logistics. Last year, with the strong support of the State-owned Assets Supervision and Administration Commission, CEC integrated China Great Wall Computer Group Corporation, thus owning Great Wall Computer Group. Development (000021), Great Wall Computer (000066), Great Wall Information (000748) and many other listed companies. In this reorganization of Nanjing Enterprises, CEC has added two new listed companies, Nanjing Panda and East China Technology, and the total number of listed companies it controls has reached Up to 13.
“CEC is more like a department store. Yang Xiaotang, former general manager of CEC, once lamented, “From financial investment, import and export, real estate, education, scientific research institutes, to color TVs, DVDs, routers, communication equipment and mobile phones, to system integration, software and chips, CEC’s business The scope is very complex. While the industry is expanding, CEC has accumulated certain risks, and this risk is approaching a critical state. ”
An industry veteran pointed out that administrative orders can only make companies bigger, but not stronger. After CEC becomes a giant, how to expand its main business and divest its auxiliary businesses, and how to balance How to ensure management upgrades is a real difficulty for all stakeholders.”
A plan called “Slimming and Strengthening” has been launched from the above-mentioned seven companies. It is reported that each company needs to identify its own strengths and weaknesses, find out the reasons for poor operations, revitalize existing assets, study industrial transformation, and ultimately divest industries that are not in line with the company's main business direction.
■ Major Events
In 1996, Nanjing Panda was listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange.
In 1999, Panda Group carried out a major asset reorganization, from a solely state-owned enterprise with a single investment entity to one consisting of Nanjing Xingang Development Corporation, Jiangsu Guoxin Asset Management Group Co., Ltd. and Nanjing State-owned Assets Operation Holding Company* **Company with the same investment.
In 2005, Nanjing Panda announced that due to payment problems with a debt of 120 million yuan owed to Nanjing Weite Investment Management Co., Ltd., its 51% interest in Panda Mobile and another subsidiary, Nanjing Panda Communications Development 95% of the equity of the company has been evaluated to be worth 120 million yuan, and it is enforced to Nanjing Weite to repay the debt owed. Panda became the first domestic heavyweight company to withdraw from the mobile phone industry.
In 2007, China Electronics, Nanjing State-owned Assets Supervision and Administration Commission, and Jiangsu Guosen Asset Management Group jointly invested in the establishment of Nanjing CEC Panda. CEC Panda will hold 47.98% of the equity of Panda Group, and will indirectly hold 51.1% of the equity of Nanjing Panda.
■ Link
To reorganize Panda, CEC plans to invest 5 billion in three years
CEC General Manager and Chairman of Nanjing China Panda Information Industry Co., Ltd. Chen Zhaoxiong said recently , CEC Nanjing Panda Company will establish a standardized legal person governance structure in accordance with the requirements of modern enterprise systems, revitalize existing assets, increase capital investment, and gradually establish a new operating mechanism through internal integration and reorganization of the enterprise.
The two future trends in the electronics industry are scale and high-end. CEC plans to build CEC Panda into CEC’s new product research and development base and an industrial base for high-end electronic information products. According to the preliminary plan of Nanjing CEC Panda Company, approximately 5 billion yuan will be invested within three years, focusing on strengthening and expanding leading industries such as high-tech electronics, display devices, household electronics, system integration and electronic engineering. By 2009, CEC Nanjing Panda Company strives to quadruple its sales revenue and total profits and taxes compared to before the reorganization, eventually reaching sales revenue of 20 billion to 30 billion yuan and total profits of 500 million to 1 billion yuan, becoming an important industrial base of CEC and a new fulcrum for the group's development.
Author: Reporter Wang Xiaoxing Source: Southern Metropolis Daily Time: 2007-05-22